SUPPLIER QUALITY

STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 1 out of 11

TITLE

SUPPLIER QUALITY
STATEMENT OF REQUIREMENTS

AMENDMENTS

Pages
Rev Effective from Amendments description
amended
0 March, 2009 First emission for Fiat Group Purchasing -

Adjustment related to harmonized process with

1 December, 2011 Several
Chrysler

2 July, 2013 First emission for FIAT Industrial Several

3 July, 2014 First emission for CNH Industrial Several

4 November, 2017 Minor Changes Several

5 December, 2022 Adjustment related to Company demerge Several

6 December, 2023 OHSAS18001 replaced with ISO45001 Page 4

Process
DRAWN UP Lucia Franco
& Methods

Massimo Process
CHECKED BY
Testaquatra & Methods

Head of
APPROVED BY Francesco Ricci
Supplier Quality

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 SUPPLIER QUALITY
STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 2 out of 11

SUPPLIER QUALITY STATEMENT OF REQUIREMENTS

This document is applicable to all external Suppliers, supplying direct materials to CNH Industrial.

CHAPTER REQUIREMENT PAGE

1 Supplier Quality Base Requirements 4

2 Quality and Environmental System Requirements 4
3 Procedures, Systems and Tools 5
4 Supplier Eligibility 7
5 Sourcing Phase 7
6 Global Supplier Scorecard 7
7 Product and Process Quality Development 8
8 Current Product Management 9
9 Problem Solving Requirements 10
10 Supplier Internal Audit 10
11 On-site support during the Launch phase 10
12 Supplier Mandatory Contacts 10
13 Quality Data Availability 10
14 Maintenance Requirements 10
15 Supplier Responsibilities in Sub-Suppliers Management 11
16 Compliance 11
17 Sustainability 11

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 SUPPLIER QUALITY
STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 3 out of 11

GLOSSARY
Acronym Description
APQP Advanced Product Quality Planning
CSL Control Shipping Level
D-FMEA Design Failure Modes and Effects Analysis
GPTC General Purchasing Terms and Conditions
GSS Global Supplier Scorecard
IRW Interim Recovery Worksheet
LPC Launch Pro-active Control
MDS Material Data Sheet
MQR Minimum Quality Requirements
MSA Measurement System Analysis
NBH New Business Hold
PA Process Audit
P-FMEA Process Failure Modes and Effects Analysis
PPAP Production Part Approval Process
PIQ Performance Index Quality
PPM Not-conforming Parts per Million
PSA Potential Supplier Assessment
PR Program Review
SQE Supplier Quality Engineer
SPC Statistical Process Control
SQP Supply Quality Performance

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 SUPPLIER QUALITY
STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 4 out of 11

1. SUPPLIER QUALITY BASE REQUIREMENTS

All Suppliers are expected to supply parts to CNH Industrial with zero defects in accordance with Customer
requirements.
Initial quotation and next quotations must include error occurrence detection devices (poka-yoke, error
proofing, etc.) and defect prevention methods. Controls subsequently implemented will be at Supplier financial
charge.

2. QUALITY AND ENVIRONMENTAL REQUIREMENTS

All CNH Suppliers must be certificated according to ISO 9001 Standard.

It is strongly recommended that Suppliers have an environmental management system in accordance with
ISO 14001 or should have equivalent internal environmental management system.
Quality and Environmental Certification documents must be uploaded in the SQP System.

Suppliers not certified to ISO 9001, must provide an outline of their certification attainment plan for further
consideration.

All Suppliers shall comply with law regulations related to Environment, Health and Safety (EHS), included Fire
Prevention License were applicable, and should comply with ISO45001 Occupational Health and Safety
Management Systems and/or SA 8000 Social Accountability.

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STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 5 out of 11

3. PROCEDURES AND REFERENCE SYSTEMS

Suppliers shall comply with the requirements contained in the following documents available at CNH
Industrial Supplier Portal website https://supplier.cnhind.com

Norms, Standards and

ITEM System & Tools
Procedures

General Purchasing Terms and Conditions

General Purchasing Terms and Conditions Regional GPTC -

Supplier Eligibility

Potential Supplier Assessment PUR 36 PSA – Attachment 1

Minimum Quality Requirements - Internal Standard

Prototype Management

Prototype Quality & Conformity ENPJ228 -

Product & Process Development

Program Review PUR 13 PR - Attachment 1

Process Audit PUR 14 PA - Attachment 1

PPAP Module

Production Part Approval Process

PUR 30 IRW Tool
(PPAP)

PPAP Booklet

Launch Proactive Control PUR 33 LPC Booklet

Compliance Data Exchange (CDX)

https://www.cdxsystem.com/cdx/
Dangerous and/or Regulated substances: PUR 30
faces/login
the related database ENS0605

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STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 6 out of 11

Norms, Standards and

ITEM System & Tools
Procedures

Failure Modes and Effects Analysis

D-FMEA ENPJ105 -

P-FMEA AIAG Reference Manual -

Significant Characteristics

ENPJ100
Internal Standard -
ENS0301

Statistical Process Control (SPC)

Fundamental Statistical Process Control AIAG

-
(SPC) Reference Manual Reference Manual

Measurement System Analysis (MSA)

AIAG
Measurement System Analysis (MSA) -
Reference Manual

Current Product Management

Non-Conforming Products Management QPS 08018 SQP EVO

Quality Performance Monitoring GSS Rules Global Supplier Scorecard

Countermeasures PUR16 CSL/NBH Attachments

Quality Control Management

PUR 30
Control Plan PPAP Booklet
AIAG Reference Manual
AIAG
Statistical Process Control (SPC) -
Reference Manual
AIAG
Measurement System Analysis (MSA) -
Reference Manual

Quality Control Records PUR 30 -

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 SUPPLIER QUALITY
STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 7 out of 11

4. SUPPLIER ELIGIBILITY

As far as the assessment of a New Supplier is concerned, the Potential Supplier Audit (PSA) activity is
aimed to verify New Supplier Process coherence with Customer requirements, identifying and preventing any
Quality issue
The assessment is worldwide adopted by CNH Industrial, and it is applied in the Sourcing for Direct Material
phase.
The Potential Supplier Assessment is a fundamental activity of the Sourcing Process and the initial step of
Advanced Product Quality Planning (APQP).
Supplier Quality will notice to Supplier, upon minimum 5 working days (to permit an effective activity
planning), the intention to perform a Potential Supplier Assessment.
Remote Potential Supplier Assessment is not admitted for this kind of assessment.

5. SOURCING PHASE

During the Sourcing Phase, when invited at the Technical Review meeting, Supplier will demonstrate the
full compliance to CNH Industrial Quality requirements providing, together with the signed acceptance of
the SQSOR itself, the following documents, that will be shared and discussed during the meeting:

5.1. Minimum Quality Requirements (MQR)

When available, Supplier shall comply with all the statements of MQR form, received during the Request
for Quotation, demonstrating the compliance within the Technical Review, by submitting the signed form.

5.2. Component Development Plan

Supplier shall provide a consistent Component Development Plan, also including all the detailed activities
for new tool development, process assessment and PPAP approval in according to Customer milestones.

5.3. Product & Process Control Plan

Supplier shall submit the Control Plan, aligned to the official sent quotation including all the characteristics
to be checked, frequency, samples size, control methods, adequate measure instruments.

5.4. Test List

Supplier shall provide the complete Test list in accordance with technical specification included in the
Sourcing Package, detailing tests, methodologies, standards, samples size and timing.

6. GLOBAL SUPPLIER SCORECARD

CNH Industrial apply a consistent performance assessment process valid for all its supply chain.
The process is aimed at providing clear and measurable objectives to our suppliers, identifying performance
gaps and related improvement actions, as well as recognizing those suppliers who perform in an excellent
way. The performance is measured through the Global Supplier Scorecard (GSS tool), based on Key
Performance Indicators (KPIs).
As part of the GSS, Quality Performance (QP) is evaluated through an overall Quality Score that includes
the contribution of different KPI as PIQ, PPM, Customer countermeasures (CSL), Supplier responsiveness on
SQP usage, APQP and PPAP results. QP is calculated for each Product Family provided by Supplier.

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 SUPPLIER QUALITY
STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 8 out of 11

7. PRODUCT AND PROCESS QUALITY DEVELOPMENT

7.1 APQP Program Review

APQP Program Review activity is aimed to preventively emphasize any critical situation of the
product/process at a particular stage of the development, checking the coherence of all the inputs
defined in the sourcing phase and identifying any appropriate actions, responsible people and timing to
solve the issue. Within four weeks from a formal Supplier assignment on a specific component or
components family, the APQP Program Review Kick Off can be executed, with the mandatory Supplier
participation together with CNH Industrial department involved in the technical assessment.
APQP Program review must be executed for all the new purchased parts bought externally classified as
High Risk, during Platform APQP Risk assessment, as defined in PUR 30

7.2 Process Audit

As far as series production is concerned, the Process Audit activity is aimed to identify and to prevent
any Quality issue in supplier processes, and to check the coherence of all the inputs (defined both in
the sourcing process and in the Program Reviews in terms of technical solutions, timing and
requirements), with what really implemented.
The Process Audit is a fundamental step of the Advanced Product Quality Planning (APQP), also
applicable in Production Phase.
Supplier agrees that CNH Industrial Supplier Quality may, upon maximum 3 working days advance notice
to Supplier, inspect, directly or by means of entities designated by CNH Industrial, Supplier's manufacturing
processes and facilities, in order to check the Supplier's compliance with Customer requirements. Supplier
shall therefore assure the access to its supplier manufacturing processes and facilities.

7.3 Production Part Approval Process

Supplier, before commencing the delivery of a new or modified Product, shall have performed all tests and
inspections agreed or required and all additional tests and inspections as necessary to ensure, control and
establish the Compliance with Customer requirements.
All Suppliers are required to develop timely the roll out of the Project and they shall pass the forecasted
gates (Program Reviews, Process Audits, Production Part Approval) in according with Customer launch
milestones and planning date.
For the initial qualification and the periodic requalification of the Products, new or modified, shall be fulfilled
the rules set forth in the CNH Industrial Procedure (PUR 30) Production Part Approval Process (PPAP).
Consequence of this approval process is the Customer acceptance of the Part Submission Warrant or
Interim Recovery Worksheet, as per Procedure PUR 30, mandatory for shipment authorization and material
usage in the Customer plants. Moreover, any fail will result in performance penalization.

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STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 9 out of 11

8. CURRENT PRODUCT MANAGEMENT

8.1 Non-Conforming Products Managements

If any Supplier’s products delivered to CNH Industrial do not comply with CNH Industrial requirements,
CNH Industrial shall have the right to communicate the issue through SQP EVO* system issuing a SQP
Bill to supplier describing the problem in detail. Supplier is required to provide containment and corrective
action, in accordance with QPS 08018 procedure, exclusively through SQP EVO usage.
Supplier will evaluate in agreement with CNH Industrial the possible reworking of the not-conforming
material, after technical and economical evaluation. Supplier can rework the material after or during the
selection, following authorized working instructions.
In agreement with the Supplier, CNH Industrial can start the authorized reworking operation
autonomously, charging the relevant costs to the Supplier.

* SQP is a CNH Industrial computer system suitable for the communication and management of non-
conformities through a report ("SQP Bills") sent from CNH Industrial production plants to suppliers.
Any economic recovery due to the return of the material or reworking activity is not a process included
in the system.

8.2 Supply Quality Performance Monitoring

Each Supplier’s Senior Management shall commit to maintain and continuously improve quality. CNH
Industrial monitors the performance of each Supplier Code / Product Family Code using SQP EVO
System. SQP EVO monitors performance data for PIQ, PQ, PPM, and other indicators as per Standard
QPS 08018/I. Suppliers are expected to monitor their quality performance on-line through SQP EVO
System.

8.3 Countermeasures
At any time that CNH Industrial determines that a Product or Supplier's process do not comply with Quality
Requirements or specifications or drawings, CNH industrial can initiate a CSL (Control Shipping Level) 1,
2 or 3, which will require Supplier (in case of CSL1) or third party (in case of CSL 2, and 3) to inspect
certain Product/Supplier characteristics and processes, identified by CNH industrial Supplier Quality in
writing, and where necessary develop a corrective action plan, all at Supplier’s expenses.
CSL 1, 2 or 3 are steps of the process aimed to support Supplier in the solution of the quality problems
that caused a non-conforming supply. Those three Levels are differentiated according to the severity and
occurrence of the non-conformities detected in the supply and are described in CNH industrial’s
procedure.

In the most serious cases of non-conforming supply, CNH industrial shall always have the right to put
Supplier in the New Business Hold (NBH) status, avoiding its participation to the sourcing procedure of
new businesses or the awarding of the businesses concerned by the current sourcing, for the whole
duration of the NBH measure.

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STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 10 out of 11

9. PROBLEM SOLVING REQUIREMENTS

Suppliers are required to demonstrate their capability to solve problems using advanced problem solving
techniques with PDCA approach (8D, Kaizen, 5W+1H, Fishbone/Ishikawa, 5 Why’s, etc.).

10. SUPPLIER INTERNAL AUDIT

Supplier has to assure that a documented internal audit plan shall exist, and non-conformities shall be
addressed immediately; corrective actions shall be documented. Site leadership shall verify compliance to the
documented plan.

11. ON SITE SUPPORT DURING THE LAUNCH PHASES

Upon request of SQ or CNH Industrial Plant, Supplier will provide on-site support during all pre-production
build phases and production launch activities.

12. SUPPLIER MANDATORY CONTACTS

Supplier shall designate and keep maintained, some specific Supplier key roles references registering them in
the CNH Industrial Supplier Portal.
Based on assigned role, they will have access rights to Customer systems, portal notification, communication
and be responsible to support operational needs.

13. QUALITY DATA AVAILABILITY

Supplier shall provide quality-related data (e.g.: defects list; historic inspection; first time quality; reject data;
capability indexes; etc.) upon request. These data may be required to determine trends and to identify root
causes of quality problems at the Customer’s Manufacturing or Assembly Plant. Improvement Plans related to
areas in which target aren’t met are also required.

14. MAINTENANCE REQUIREMENTS

All Suppliers are required to roll out and to put in practice an effective Maintenance Plan for all tooling, included
the tooling belonging to the Customer.

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STATEMENT OF REQUIREMENTS

Rev. 6 – December 2023 Page 11 out of 11

15. SUPPLIER RESPONSIBILITIES IN SUB-SUPPLIERS MANAGEMENT

Supplier is responsible for implementing and adhering to CNH Industrial Requirements for all components of
the assembly including directed buy parts unless otherwise specified by the procuring division. CNH Industrial
Supplier Quality may, at its own discretion, will identify a SQE to work with the Supplier’s interface in order to
share and agree on component related issues resolution process.

On all the purchased raw material/parts/subcomponents/modules, Supplier shall:

- put in place a sub-suppliers management plan (in-house resources / expertise, etc.)

- describe plan to manage quality issues related to Sub-Suppliers
- approve parts with Production Part Approval Process (PPAP) or equivalent methodology
- describe supply chain communication process that supports engineering data, customer requirements,
scheduling, etc.

Supplier is completely responsible for assuring the right quality content of the product, included any raw
material / part / component / module supplied by Sub-Suppliers.
The use of customer-designated sources does not relieve the supplier of the responsibility for ensuring the
quality of purchased parts.
Supplier is completely responsible for above mentioned points also when his sub-suppliers send parts directly
to Customer plants.

16. COMPLIANCE

Supplier is obliged to certify that the chemical composition of the supplied parts is compliant with the
Regulations in force (e.g. REACH, RoHS, TSCA or other applicable regulations globally).
In particular for each product (article) manufactured, Supplier must upload its Material Data Sheet (MDS) into
the CDX system (Compliance Data Exchange).

The System is reachable through the web Site:

website: https://www.cdxsystem.com/cdx/faces/login

The MDS validation should be obtained in CDX systems, prior to PPAP Submission to CNH Industrial, in
accordance with the part availability requirements and Global Product Development milestones.

17. SUSTAINABILITY
Supplier must respect CNH Industrial Supplier Code of Conduct. Supplier is required to fill the annual
Sustainability self-assessment, supporting sustainability activities and taking necessary actions to improve the
performance when applicable.

SUPPLIER SIGNATURE FOR ACKNOWLEDGEMENT

SUPPLIER REFERENCE SIGNATURE:
NAME:

ROLE:

DATE:

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